Blackstone Group Launches Takeover Bid Of KCS

[rdamon]

Found some more info:

https://www.federalregister.gov/documents/2018/11/21/2018-25388/csx-transportation-inc-lease-western-and-atlantic-railroad

Financial Arrangements. According to CSXT, no new securities will be issued in connection with the Lease. (Appl. 8.) CSXT states that, under the Lease, CSXT would pay Georgia a monthly rental of $1,008,333.33, which would increase annually by 2.5% compounded. Additionally, CSXT states that, by July 31 of each year, it would pay Georgia additional rent consisting of 50% of the revenue generated from all agreements, subleases, easements, or licenses attributable to the Line for the previous year. CSXT states that it will not incur any fixed charges as a result of the Lease. (Id. at 10.)

[charlie hebdo]

Greyhounds: You simply state your opinions as though they were facts,  without evidence.

[Gramp]

greyhounds, with the railroad having a centralizing nature, do you see a future for it? It seems that the forces of decentralization have the upper hand. 

[JPS1]

charlie hebdo

 I'm not sure the railroads pay much in federal taxes ........... 

According to the Association of American Railroads, in 2017 – latest numbers – the association’s members incurred tax expense of $25.9 billion, i.e. $16.7 billion state and local; $9.2 billion federal.  The local taxes included income, property, sales, fuel, etc.  The federal taxes include income, excise, fuel, etc.   

 

In 2019, as per Compustat, the major U.S. headquartered freight railroads showed the following federal, state, and foreign income tax expenses and/or taxes paid:

 

CSX:  $985 million of federal and state income tax expense; effective tax of 22.8%; income taxes paid $691 million.

 

Norfolk Southern:  $769 million expense, 22% rate, and $543 million paid. 

 

UP:  $1.8 billion expense, 23.6% rate, and $1.4 billion paid.

 

BNSF:  $1.8 billion expense, 24.4% rate, and $1.2 billion paid.

 

KCS: $248 expense (includes $170 million of foreign income tax expense), 31.5% rate; $171 million paid.

 

With the exception of KCS, which is impacted heavily by the Mexican tax code, the effective tax rate for the aforementioned railroads was between 22 and 24.4 percent, which is in line with the average effective income tax rate for the S&P 500 for the three years ended 2018.     

 

The differences between tax expenses and taxes paid usually can be found in a reconciliation of deferred taxes, which arise because of differences in GAAP accounting and tax accounting or disputes with the tax authorities.

[SD60MAC9500]

 

charlie hebdo

I proposed payment, not just compensation.  Then we might get better ROWs and electrification where traffic is sufficient.  The railroads would have a ton of money to use on new equipment.  Any agreement would require that,  not declare huge dividends to stockholders. Time to move into the 1980s at least,  if not into the future. 

 

 

Where do you plan to put this electrification where traffic is sufficient? Are the expenses of clearance modification and removal worth the cost? You need at minimum 3' of clearance between 20'2" height and overhead line to prevent arcing.. Electrification is one of the reasons the Milwaukee Road had to abandon it's entire Pacific Extension, and eventually succumb to bankruptcy.. This isn't Europe. 

 

 

[BaltACD]

charlie hebdo

I proposed payment, not just compensation.  Then we might get better ROWs and electrification where traffic is sufficient.  The railroads would have a ton of money to use on new equipment.  Any agreement would require that,  not declare huge dividends to stockholders. Time to move into the 1980s at least,  if not into the future. 

Railroads have been reducing their car fleets over the last two decades.  When watching passing trains look at all the car initials ending in X.  Cars that once had railroad reporting marks.

The PSR model is about getting as much investment out of the railroads and into the hands of the stock holders as possible - by whatever feats of financial legerdemain they can create.  As tightly as any 'thinks' they can tie up the money and keep it 'in the property' the PSR crowd perform legal dances on the pointed end of a pin and liberate it for their purposes.

[Los Angeles Rams Guy]

Looks like we're back at Square One regarding KCS as they formally rejected the latest Blackstone Group offer.  

[BaltACD]

Los Angeles Rams Guy

Looks like we're back at Square One regarding KCS as they formally rejected the latest Blackstone Group offer.  

Good for KCS!